Impact Audit of Village Enterprise

ImpactMatters conducted an impact audit of Village Enterprise, a nonprofit that aims to increase income for extremely poor residents of rural sub-Saharan Africa (starting with Kenya and Uganda). Village Enterprise delivers a yearlong, four-part program to the extreme poor: cash to start a business, training, mentoring and a savings group.

The impact audit, published in February 2018, was a re-issuance of an audit of Village Enterprise completed in 2016. We re-issued the audit in light of new evidence on the Village Enterprise microenterprise program: a high quality randomized controlled trial (R.C.T.) in Uganda, which found modest, statistically significant increases in consumption, assets and income for participants in the treatment group relative to the control group. By our estimates, the microenterprise program raised the total of consumption and assets by $1.60 per household, over 10 years, for every $1 that Village Enterprise spent to deliver the program. Based on two long-term R.C.T.s of similar programs in India and Bangladesh, we assume the impact of Village Enterprise is sustained for a total of seven years, declining to zero by year 10.

In addition to impact and cost, the audit assessed the quality of Village Enterprise’s systems for monitoring program delivery and learning from data. Village Enterprise has excellent systems for both. Village Enterprise’s careful monitoring of each component of its intervention (cash grant, training, mentorship, savings groups) suggests it delivers its program consistently and at high quality. We also commend Village Enterprise for putting its flagship microenterprise program under the microscope of an R.C.T. and contributing to the evidence base for poverty alleviation programs.

Impact and Cost

Approximately $1.60 in combined consumption and assets per $1 spent

Impact and Cost Calculation

From the perspective of Village Enterprise — taking account of the costs it incurs to deliver the program — we estimate the benefit/cost ratio at 1.6:1. (This excludes the costs of facilitating a randomized controlled trial.) The ratio rises to 220:1 when only the costs incurred by participating households are considered: $4 per household. Taking account of all costs caused by the program, regardless of who bears them, the benefit/cost ratio is almost identical to the first: 1.6:1. Our calculations assume that consumption gains persist for seven years after the intervention begins, then gradually decline over the next three years. We also assume that any differences in assets (wealth) between participating and non-participating households as a result of the program disappears by the 10-year mark.

Quality of Evidence

Quality of Evidence Assessment

The estimate of impact is based on a high quality R.C.T., which found modest, statistically significant increases in consumption, assets and income for households in the treatment group relative to the control group. We assume the impacts on consumption last for five years beyond the two directly observed in the R.C.T. Our assumption is based on two medium quality R.C.T.s of similar programs, which observed increasing impact on consumption over a span of seven years. Lacking evidence past the seven-year mark, we assume impacts gradually dwindle to zero by year 10.

Organizational Effectiveness

Geography: Kenya and Uganda

Program Stage:
Scale

Age:
Current model in operation for seven years

Size:
Village Enterprise trained 1,179 entrepreneurs in its 2014 R.C.T. To date, it has trained 156,200 entrepreneurs.

Quality of Monitoring Systems

Although there is small room for improvement, Village Enterprise’s monitoring systems are, on the whole, very robust, suggesting that it delivers its program consistently and at high quality.

Data Type

Credible

Actionable

Responsible

Transportable

Activities

Targeting

Engagement

Feedback

Outcomes

Corresponding Rating

Learning and Iteration

Village Enterprise staff, at almost all levels of the organization, proactively and continuously pilot-test new ideas for the design of the microenterprise program and generally make decisions based on the results of those tests. We also commend Village Enterprise for participating in an R.C.T. that tested its flagship microenterprise program against variants and isolated components of the program.